Do You Owe Your Soul to the Company Store?

Warning: "communist dictator bosses" may be hindering the freedom and dignity of American workers with their nearly unaccountable power.....

Elizabeth Anderson sees bosses as ruling workers' lives and firms as internal "private governments" with excessive and often abusive control over employees. In this week's EconTalk episode, host Russ Roberts poses questions about such abuse, monopsony power, freedom of choice in the workplace, and more in this discussion about today's labor markets, which Roberts says stretched his thinking considerably. Now we'd like to hear your thoughts about the crucial role that work and the workplace plays in so many of our lives.

1. Is Professor Anderson's argument predicated on data of the inflection point of the 1970's or is her point more that any degree of employer abuse - no matter how much the nature of the workplace has improved over time - worth examining? What do measurements of the middle class reveal or conceal about market forces in today's workplace?

2. Professor Anderson argues that the reach of employer power over workers can extend beyond the workplace into people's private lives as revealed through social media. One objection is that employees may exercise their "exit option," but what else might counter this power? To what extent do you believe potential boss abuse is restrained due to ubiquitous tweets, posts and articles about employers?

3. How can employees mitigate the potential monopsony power of an employer? Beyond choosing a different "dictator boss" (Anderson) or choosing self-employment (Roberts), what other options or factors contribute to workers' autonomy?

4. As choices for low skilled/low income earners in urban housing, higher education, and licensing continue to be limited and as the trajectory of increased productivity through automation and innovation reduces the quantity of low-skilled available jobs, what do you predict about the future of the American workforce? Are you more optimistic or pessimistic, and why?

5. Why don't more temporary work agency that pay workers more (exploit them less) emerge? To this suggestion, Anderson replies that there are only a few of these firms and that a competing firm would make less profit. What determinants of supply of and demand for labor will likely be explored in Roberts's promised future episode on the market for temporary? (Bonus points if you can graph it!!!)

Alice Temnick teaches Economics at the United Nations International School in New York City. She is an Economics examiner for the International Baccalaureate, teaches for the Foundation for Teaching Economics and Oxford Studies Courses and is a long-time participant in Liberty Fund Conferences.

Comments and Sharing

1. Is Professor Anderson's argument predicated on data of the inflection point of the 1970's or is her point more that any degree of employer abuse - no matter how much the nature of the workplace has improved over time - worth examining? What do measurements of the middle class reveal or conceal about market forces in today's workplace?

I think there are a few different claims Anderson is making:

A. A theoretical claim about how labor markets work - There is a large power asymmetry between bosses and employees (in many work places), which can, in principle, lead to systemically unfair treatment of employees.

B. An empirical claim about current employees - A significant number of employees in the US today are treated unfairly.

Anderson's evidence for "B" includes both the apparent inflection point of the 1970's and the specific examples of employer abuse. I don't think she necessarily needs the 1970s change to support claim "B".

I also think Anderson would say improvement in workplace conditions over the past 200 years doesn't contradict her claim, it's actually more evidence in her favor, because she views policy changes that supported workers as central to the long-term growth story. I'm sympathetic to that view.

I heard the word "immigration" mentioned once, and only in the context of a side issue.

If the professor wants lower skilled people to gain some leverage in the workplace so they can demand improvements in working conditions, how about shrinking the labor pool and forcing employers to have to compete for employees , maybe just a little bit...? The open spigot of illegal, and even legal immigration into the US is the modern slave trade.

The workplace outrages lamented by the professor will NEVER get better as long as near unlimited numbers of desperate people are allowed to stream into the country. What's that thing called....supply and demand?

To Mr. Perry's point,
In the podcast, it is discussed that one could just go get another job, but then this typically results in working for a different dictator. So the worker is back in the position they started with.

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